Project Finance 2020 Switzerland

Author:Mr Daniel Hayek and Mark Meili
Profession:Prager Dreifuss

1 Overview

1.1 What are the main trends/significant developments in the project finance market in your jurisdiction?

Infrastructure projects in the areas of leisure and property, transport, energy and the water sector continue to be significant. The projects are usually financed by public funds, but due to projected increases of investments, private funds will likely become more important in the future.

1.2 What are the most significant project financings that have taken place in your jurisdiction in recent years?

The market has been dominated by transport and leisure/property projects; for example, the Lugano Congress Center.

2 Security

2.1 Is it possible to give asset security by means of a general security agreement or is an agreement required in relation to each type of asset? Briefly, what is the procedure?

Asset security can be given by pledge or by assignment or transfer for security purposes.

A pledge gives the secured party possession of the security while the security provider retains ownership of the security. A pledge can be obtained over movable assets, real estate property and claims and rights. Because of the principle of accession (Akzessorietätsprinzip), which is applicable to pledges, each of the secured parties would need to be a party to the relevant pledge agreement. In a security trustee or security agent structure, Swiss pledge agreements therefore provide that the secured parties - represented by the security agent or trustee - are parties to the agreement.

The parties may favour creating security by assignment (for claims and rights) or transferring for security purposes (for movable assets), which gives the secured party full ownership of the asset. The secured party is contractually obliged to re-assign or re-transfer the asset to the security provider. An assignment is a non-accessory security which means that a security agent or trustee may hold the security as fiduciary in its own name and for the benefit of all secured parties.

The valid creation of a security requires a security agreement and the perfection of the security interest. In the security agreement, the security provider undertakes to pledge or transfer/ assign for security purposes certain assets to the secured party.

Depending on the kind of asset, perfection is achieved through a declaration of pledge/assignment or delivery of the movable asset. Security interests over certain assets (real estate property, railroads, airplanes and ships) require registration.

In order to obtain security over all assets of a Swiss company, a combination of a share pledge agreement and of security agreements over the company's assets is required.

2.2 Can security be taken over real...

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